Advice on Affordable housing in Huntington Beach

NEW -> Contingent Buyer Assistance Program
tulip_IHB

tulip_IHB

New member
Hi,



Can anyone advice me on Huntington Beach Affordable housing, should I buy or not since I qualify for the program. Here is the story....



The detached tri-townhouse is located in the Seagate area (Main and Ellis). It is 3 bedroom, 3 bath listing price of $ 399K with HOA of $ 168. I still think it is a lot of money for a Townhouse, but the location for the kids school is excellent. It was build in 2000, all 146 units are affordable.



Any thoughts?



Thanks
 
Let me add to the posting....



I want to know if this is a good buy, we are not looking to make a profit since it is affordable housing. My contention is should I buy it or not since for 30K more I could buy a house in Westminster, or for 20K more I could buy a townhouse in Fountain Valley and when it is time to sell...I don't have to deal with the city.



Thanks
 
I was in the same situation as you last year.. it was in the same area too.



If you're not worried about building equity and you plan on staying there for a long time, then I think it's good move. You get to live in a beautiful area with great schools and just miles from the beach.



However if you *want* to build equity, then this place won't do it for you unless you stay for reeeally long time. That's because the city that determines the selling price of your home based on average area income. For example, the house I was looking at last year (3/3 also) was 375. The original owners paid 338. So in five years, they sold at 37k profit.... but then they had to pay realtor commissions.
 
MK,



I am don't mind the slow equity built up, what worry me is the city red tapes. And will it be hard to find a buyer when we are ready to sell. We looking at long term living there like 10 years, because of the kids school.



Did you end up buying it? Did you like the area?
 
What are the comparable rents in the area? That would lead my decision making at this stage. While that is a very nice area and far more preferable than Westminster, getting tied down to a mortgage in a depreciating market means you might be sacrificing a better deal in the future. It's not like there is going to be a shortage of homes to choose from.
 
These homes can only be sold to another buyer who would qualify under the same terms. And the price could be vastly affected by interest rates. If the city determines that a family can spend, hypothetically, $1200/month for housing -- there is a great pricing difference if rates are at 6% vs. 9%. In a high rate environment, the resale value must go down in order to meet the monthly payment criteria. Or get a good attorney, sue the city because you didn't "know" that you couldn't sell at market value.



http://www.ocregister.com/ocregister/money/housing/article_1208806.php



http://www.ocregister.com/ocr/sections/local/local/article_480706.php
 
Almost there,



Are you kidding me? Suing the city because you didn't know that you can sell at market price? It clearly stated the program is 30 years, you can sell at market price when the 30 years restriction expired.



The only things I don't understand is when interest goes up, the housing price go down calculation with the city.
 
tulip,



we ended up not buying it for a couple of reasons. the major reason being the lack of equity potential. we're a young couple so that was important to us. also, i didnt like the floorplan very much. even though it was almost 1500sqft..it felt very very cramped. and last, the selling agent was a real PITA! all signs pointed to run!



but as far as finding a buyer, i really dont think you'll have a problem. if the market completely crashes and the comps drop to, say, 300k, then you'll still be able to sell at that. if the comps sustain at 600k, you'll be able to sell it for low 400's. either way, the selling price should at market or way below. the house that i saw, comps were 600-700. so at 375K, people were grabbing at it like monkeys. after one day, the listing agent changed the status to HOLD DO NOT SHOW because of all the calls she got. and the buyer's agent comission was only 1.5%.



>>> the only things I don't understand is when interest goes up, the housing price go down calculation with the city.

here's a basic example...



based on the current area incomes, let's say the city calculates that the max a family should pay for housing is $2000/month.



based on current interest rates, let's say that $2000/mo can buy you a house for $300k.

if interest rates skyrocket, then $2000/mo will no longer buy you a $300k house, but rather a $250k house. so no matter what the market is or what you paid for it, that's the price the city will allow you to sell for.
 
MK9,

Thanks for the info. The other factor is the HUD income guidline...this factor in the housing selling price from the city. Here is the example how they caculate the selling price. The only factor I don't understand is how do they arrive at Present Value of Income Available for Mortgage Payments over 30-Year Term amount. Can you explain?



Moderate Income Limit for a Family of 4

(3 Bedroom Home) $90,700

35% of Income $31,745

Less Housing Expenses:

HOA Dues -1,575

Utilities Expenses -660

Property Insurance -720

Maintenance -600

Property Taxes -4,265

Annual Income Available for Mortgage Payments $23,925

Interest Rate 5.39%

Present Value of Income Available for Mortgage Payments over 30-Year Term $355,446

Plus 10% Down Payment +39,494

Maximum Sales Price $394,940
 
you can use excel to determine the present value. the formula would be .. =pv(5.39%/12, 360, 23925/12). the answer comes out to 355451 which is slightly higher than yours. i dont know how they came up with their number; i could be wrong on my formula but im pretty sure thats what it is.
 
I think now would be a great time to buy an affordable home. Had you done so in 2000, you would have sorely regretted it. I think prices will still continue to drop in 2008, and may stay flat in 2009 and 2010. Add in another 2 years for equity to start building again, I don't think you'll "earn" anything until after 5 years. $400K for a relatively new townhome next to Huntington Beach High is a very desirable price. Buy it. Live in it for 5 years. Then sell once the market starts picking up again.
 
Hi



I am a "new student" to study in boying affordable house.



I got some news from my friends that affordable house is good for the first time buyer.



Could anyone provide some links or information about buying affordable house in irvine?



Thanks
 
<p>What is the appeal of this program over just renting? Buying this doesn't give you much equity potential, and exposes you to downside losses, and makes you pay property taxes, right? Why not just rent and save your money?</p>
 
<p>1. You'll own the place so you can do whatever you want to it.</p>

<p>2. You'll lock in your monthly payment, so you never have to worry about rent going up.</p>

<p>Although owning does not save you much in the first few years, you should save a substantial amount when rent starts increasing.</p>

<p>The only downfall is that on a rising real estate market, you don't get to profit from the equity buildup.</p>

<p>That's why it would have sucked to buy in 2000 when the market was going up. For all the residents there who bought when the property was first built, they must feel rather sore. But being that the market peaked in 2006 and probably won't bottom until 2009, buying an affordable home in 2006, 2007, or 2008 is a GREAT idea!!</p>

<p>I suggest you buy it now, ride out the real estate down cycle, and buy another home in 2010 if you can afford it then.</p>
 
House for rent in HB-- Dutch Haven Marina. 3 miles to the beach, no beach traffic. Detached, 3bed/2ba 1200 sqft on a 6000sqft lot. 2 Car Garage. New Appliances just installed. 2450/month.





So, I'm going with, you should rent. And from me.
 
Affordable Housing is not cheap, the selling price is set by the city currently asking price is $ 399 to $ 407 for a three bedrooms townhouse with HOA of $ 170, this HOA does not include water, trash or taking care of maintenance like roofing or painting of your townhouse like other HOA would.



You have to go with 30 years conventional fixed loan, no creative financial like 10 years interest only. It does required a 10% down with no help from the city. So, 399K with 10% down, you are looking at a payment of almost $ 2700 a month (Principal, interest 6%, HOA, property insurance, and property tax (not including PMI).



So...I think it is better to rent.

The other problems is when you decided to sell, it is very very hard to find a qualify buyer that match the city requirement, and at the same time qualify for the loan.



You can't buy a second home, because the affordable housing require you in order to buy a second home you have to sell your primary residence which is the affordable housing.



So affordable housing is not very affordable.



Originally this program started in 2000 for this location, they were selling it for $ 240K. So, the original owner make a big chuck, if they are selling it now for $ 399K, not as much as market rate.



ASD- Affordable housing program in Irvine is not open, so is Tustin. They have a long waiting list.
 
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